Leyton whitepaper
Your Innovation Incentive: The R&D Tax Credit
Explore the tax saving benefit of the Research & Development (R&D) Tax Credit, irrespective of your company size or industry.
Download now
The R&D Tax Credit
Tax incentives for your innovation
Over 60 industries can qualify!
What is the R&D Tax Credit?
The Research and Development (R&D) Tax Credit is a government-sponsored tax incentive offered to companies who create or improve a product or process in the course of their business.
The credit dates back to 1981, when it first became available to taxpayers on a temporary basis. In 2015, when the PATH Act was put in place, the R&D credit became permanent and with it, revised qualifications that greatly expanded the eligibility for businesses to qualify. With these changes, qualifying small businesses may claim the Payroll Tax Credit to offset some of their payroll tax liability.
Many businesses are unaware that their daily operations could qualify for a dollar-for-dollar tax credit, irrespective of industry or company size. Additionally, most states offer an R&D credit that can supplement the federal R&D credit, and qualifying businesses can claim both!
What activities qualify for the R&D Tax Credit?
- Conducting all R&D activity in the US
- Developing or designing new and innovative products or processes
- Improving existing products, processes, or prototypes
- Reviewing the potential of several alternatives or methods during the development or improvement process
Learn how your industry qualifies!
What costs qualify for the credit?
What costs qualify for the credit?
The four-part test
To be eligible for the R&D Tax Credit, the IRS has enforced a four-part test to determine qualified R&D activity. An activity must meet all four parts to be considered a qualifying research activity. The four parts are:
The four-part test
To be eligible for the R&D Tax Credit, the IRS has enforced a four-part test to determine qualified R&D activity. An activity must meet all four parts to be considered a qualifying research activity. The four parts are:
- Business Component Test: Has the company demonstrated that the information being discovered was to develop a new or improved product, process, computer software, technique, formula, or invention, which is to be held for sale, lease, license, or further used in its trade or business?
- Uncertainty Test: Has the company demonstrated that it tried to learn something new about the product or process being changed in order to improve it and has it demonstrated that the product or process could not be improved without going through this discovery process?
- Technology Test: Can the company demonstrate that its development of a business component relied upon the principles of the physical or biological sciences, engineering, or computer science?
- Experimentation Test: Has the company demonstrated that it went through a process of elimination, trial and error, or other evaluation of alternatives in order to arrive at the new or improved product or process?
Let’s find out if your business qualifies for the R&D Tax Credit!
Congratulations!
How it works
1
First Conversation
Meet our commercial team to receive an overview of the R&D Tax Credit and basic R&D eligibility assessment
2
A Comprehensive R&D Study Report
Our teams collect your information to write a comprehensive technical narrative and provide detailed submission guidance.
3
Engagement
Engage with our tax & technical teams to review all eligible projects to start building your claim.
4
A Comprehensive R&D Study Report
Our teams collect your information to write a comprehensive technical narrative and provide detailed submission guidance.
5
Receive Your Benefits!
Offset your payroll liability with the Payroll Tax Credit, or reduce your income tax liability with the R&D Tax Credit.
6
R&D Study Review & Planning
Review your R&D Study with our team and build a plan to increase efficiencies for future claims.
Payroll Tax Credit
The Payroll Tax Credit is a subset of the R&D Tax Credit that allows qualifying small businesses to redice their payroll tax liability
Find out if you are eligible to claim the Payroll Credit.
R&D Tax Credit for startups & small businesses
The R&D Tax Credit can help startups and small businesses offset some of their payroll tax liability. In order to claim the Payroll Tax Credit, companies must meet certain requirements, including qualifying as a Qualified Small Business.
To be considered a Qualified Small Business, your company must not have gross receipts for any years preceding the 5 tax year period ending with the credit year. In addition, the year you are claiming, gross receipts must be below $5M.
Find out if you are eligible to claim the Payroll Credit.
R&D Tax Credit for startups & small businesses
The R&D Tax Credit can help startups and small businesses offset some of their payroll tax liability. In order to claim the Payroll Tax Credit, companies must meet certain requirements, including qualifying as a Qualified Small Business.
To be considered a Qualified Small Business, your company must not have gross receipts for any years preceding the 5 tax year period ending with the credit year. In addition, the year you are claiming, gross receipts must be below $5M.
Find out if you are eligible to claim the Payroll Credit.
Why choose Leyton?
Allow our experience to unleash your potential!
+
60
Industries Served
+
20
Years of Experience
+
100
R&D Tax Credit Experts
Why choose Leyton?
Allow our experience to unleash your potential!
+
60
Industries Served
+
20
Years of Experience
+
100
R&D Tax Credit Experts